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HM Government statements on post-Brexit access to Horizon 2020 research funding and successor research funding programmes

What follows respresents the understanding of the department of the chronology of HM Government statements on post-Brexit access to Horizon 2020 research funding and successor research funding programmes.

In a letter dated 12 August 2016, the Chancellor of the Exchequer stated

"... while we remain a member of the EU and we will work with the Commission to ensure payment when funds are awarded. The Treasury will underwrite the payment of such awards, even when specific projects continue beyond the UK’s departure from the EU."

The 12 August 2016 letter from the Chancellor of the Exchequer clarified that those projects 'awarded' (which might refer to either funding decisions, their communication to applicant, or to the completion of funding agreements) before we leave the EU would be underwritten by HM Treasury.

On 13 August 2016, the commitment in the 12 August 2016 letter from the Chancellor of the Exchequer was supplemented by a statement from HM Government that included a commitment by the Chancellor of the Exchequer that

"That is why I am confirming that ... Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave."

On 5 September 2016, this commitment was repeated by the Secretary of State for Exiting the European Union on the floor of the House of Commons, where he stated

"The Chancellor has confirmed that ... research and innovation projects financed by the European Commission by money granted before we leave the EU will be underwritten by the Treasury after we leave."

On 3 October 2016, in his Conservative party conference speech, the Chancellor of the Exchequer stated

"I’ve already guaranteed the funding for projects signed prior to this year’s Autumn Statement. Today, I can go further. The Treasury will offer a guarantee to bidders whose projects meet UK priorities and value for money criteria ... that if they secure multi-year EU funding before we exit ... we will guarantee those payments after Britain has left the EU."

The previous commitment to fund projects signed prior to the autumn statement was not a commitment relating to research and innovation funding but that

"... all structural and investment fund projects, including agri-environment schemes, signed before the Autumn Statement will be fully funded, even when these projects continue beyond the UK’s departure from the EU".

To the extent that the conference speech of the Chancellor of the Exchequer conflated "all structural and investment fund projects, including agri-environment schemes" with "research and innovation projects", it represented a reduced offer on the underwriting of research and innovation projects by virtue of the conditionality requiring funded projects to "meet UK priorities and value for money criteria", not present in the commitment given by the Secretary of State for Exiting the European Union on the floor of the House of Commons on 5 September 2016, per 5.

On 12 December 2016, before the Treasury Select Committee, the Chancellor of the Exchequer was questioned on these points in the following exchange.

"Q310, Helen Goodman: I want to ask you about another sector that is worried about the transition. That is the university sector. You have made two statements about science spending. Over the weekend, I was talking to somebody from Newcastle University who was thinking about putting bids in to Horizon 2020. If they write a bid in 2017 for a project that begins in 2018 but is not completed until 2023, they could not work out whether your guarantee would cover them. Would your guarantee cover them?

"Mr Philip Hammond: Yes. If that project is endorsed by the relevant sponsoring Department here as being in line with Government policy and a value-for-money project and it is awarded EU funding, the Treasury will underwrite that commitment of EU funding for the duration of the project.

"Q311, Helen Goodman: I noticed you said that it needed to be good value for money and in line with domestic strategic priorities in a statement on 3 October. When you are adding those extra criteria, are you not adding another bureaucratic process for the academics who are having to apply? They all complain about applying for Horizon 2020 money being a very bureaucratic system. You are saying, “In addition to your Horizon 2020 application, you have got to clear this.” I am not sure who you would clear it with. It might be the Department of Health or BIS or the Department for Education. Is there a system set up for them to do that already?

"Mr Philip Hammond: There is. They should be able to clear that with the relevant sponsoring Department. The point is this: we have been saying for many years, and it continues to be the case, that not all EU funding is well targeted or good value for money. Before I commit the UK taxpayer to spending what will be UK taxpayer funds after we leave the EU on supporting a programme, we need to make sure that that is a programme that is value for money and broadly aligned with UK government objectives. I do not think it is a very high threshold. I would hope that there are a relatively small number of projects that would not qualify, and that it will be quite simple for people who are intending to bid for projects to get them cleared or otherwise by the sponsoring Department.

"Q312, Helen Goodman: Even the Foreign Secretary said on The Andrew Marr Show the other day that he thought that we should join the successor programme to Horizon 2020. Is that your aspiration as well?

"Mr Philip Hammond: Very much so. I do not know why you say “even the Foreign Secretary”. The Foreign Secretary is a great enthusiast for pan-European co-operation from outside the European Union. Programmes like science, technology, R and D and academic exchange programmes are hugely beneficial to this country and hugely beneficial to countries across Europe. We would very much hope that we will be able to agree a format that allows us to continue to participate in those programmes.

"Q313, Helen Goodman: I agree with you about that of course. It sounds as if you are not quite confident that you will succeed in securing that, which is why you feel you need to offer this guarantee that the UK Treasury will be providing the funds. Is that fair?

"Mr Philip Hammond: No. I wonder what discussion we would be having here at this Committee if I had not offered that guarantee. The reason I have offered the guarantee is to avoid any uncertainty, to reassure people who are bidding for projects and, perhaps just as importantly, to reassure the potential collaborators in other European Union countries who they will be working with that, if they get the award, they can be confident that the project will proceed. Whether it is funded by some successor pan-European association, or whether it is funded directly by the UK Treasury, they will continue to get the funding. It is to remove uncertainty and any possible doubt."

Consitent with the conference speech of the Chancellor of the Exchequer (per 6), the guarantee of underwriting (per 2, 4 and 5) had become conditional on the requirement for projects to be approved by a "relevant sponsoring Department here as being in line with Government policy and a value-for-money project" before HM Treasury commit to underwrite a project. It is not clear if decisions would be made on a project-by-project basis or if only particular EC schemes would be underwritten (for example, schemes with the potential for significant budget components to be passed to overseas partners, might be viewed less favourably).

On 8 December 2017, the EU and UK agreed the text of a 'Joint report from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union', within which paragraph 71 reads

"Following withdrawal from the Union, the UK will continue to participate in the Union programmes financed by the MFF 2014-2020 until their closure (excluding participation in financial operations which give rise to a contingent liability for which the UK is not liable as from the date of withdrawal). Entities located in the UK will be entitled to participate in such programmes. Participation in Union programmes will require the UK and UK beneficiaries to respect all relevant Union legal provisions including co-financing. Accordingly, the eligibility to apply to participate in Union programmes and Union funding for UK participants and projects will be unaffected by the UK’s withdrawal from the Union for the entire lifetime of such projects."

On 8 December 2017, in connection with the 8 December 2017 agreement of the joint report between the EU and UK, the Minister of State for Universities and Science stated

The 8 December 2017 agreement of the joint report between the EU and UK seems to mean that UK universities may continue to participate in EU funding schemes until the end of 2020, as if the UK continued to be an EU member state beyond its intended withdrawal from the EU in March 2019. Under the agreement, funding agreements resulting from awards made in 2020, some of which might start in 2021 and end as late as 2026, would be honoured by the EU. The implication is that the agreement supersedes the previous proposed arrangement of conditional underwriting by HM Government for research funding awarded before UK withdrawal from the EU, per 9.